You may be among the majority of taxpayers who no longer itemize income tax deductions and cannot enjoy the tax advantages of the charitable contribution deduction. However, there is good news for donors age 70½ or older: a Qualified Charitable Distribution (QCD), sometimes called the “IRA Charitable Rollover,” can provide the income tax benefits of a charitable deduction even if you do not itemize.

Ordinarily, you owe income tax on any withdrawal from your IRA. However, there is no income tax on a Qualified Charitable Distribution. Since a QCD is not included in your taxable income, the tax result is similar to a tax-deductible contribution. However, a QCD can be even better than a charitable deduction because lowering your taxable income can also reduce taxes you might owe on Social Security as well as your Medicare premiums. Finally, if you must take Required Minimum Distributions (RMD), your QCD contribution will reduce your RMD without adding to your taxable income.

There are some of the requirements for a QCD contribution:

• You must be 70½ or older at the time of your contribution.
• Your contribution must go directly from your IRA to MUSC.
• There is a limit of $100,000 per year; spouses with their own IRA accounts can each make gifts of up to $100,000 per year from their own account.

Another tax savvy alternative for charitable estate giving is to designate MUSC as the beneficiary of your retirement account. This gift is simple because there is no need to modify your will or living trust. All you need to do is complete a beneficiary designation form with your plan administrator.

A gift of retirement assets is an efficient and tax-wise way to make an estate gift. If you leave your retirement account to individuals, income tax is due when they receive distributions, leaving very little of the remaining assets for their use. If, instead, you donate your retirement account to MUSC, 100% will be available for our charitable work. If you want to remember MUSC in your estate plan, give the more heavily taxed retirement account assets to MUSC and leave other assets – cash, securities, real estate – to your heirs. Unlike retirement assets, these assets may be received and sold by your family without paying any taxes.

Your IRA administrator can help you make a Qualified Charitable Distribution or beneficiary designation. Always consult with your advisors before naming the beneficiaries of your retirement assets. Often it is as simple as completing a form on their website. We would be happy to work with and your advisors to ensure your contribution works as you intend.